ResCap Liquidating Trust last week filed two new lawsuits against lenders as it continued its efforts to recover losses due to bad loans purchased from correspondents that later forced the company into Chapter 11 bankruptcy. No other details were provided by defendant attorneys with American Mortgage Law Group, which warned that the Dec. 2 filings in Minnesota federal district court may trigger a second wave of litigation by the trust. AMLG said it has been helping a number of lenders with pre-litigation demands from the trust and has seen increased activity on that front. On Nov. 16, a federal judge dismissed...

Origination of commercial mortgages could reach $515 billion this year, a slight improvement over 2015, but more lenders  life insurance companies and banks, in particular  are keeping the loans on their books, which doesnt bode well for CMBS issuance. Its the same conundrum facing the jumbo residential market: plenty of lending, but not so much in the way of securitization. As Inside MBS & ABS reported recently, issuance of CMBS increased...

The Structured Finance Industry Group this week put more flesh on the bones of its proposed deal-agent role in future non-agency MBS and introduced a plan for improved communications among MBS investors. The fifth edition of SFIGs RMBS 3.0 Green Paper adds recommendations on data standardization, enforcement mechanisms for breaches of deal terms and materiality standards. The new proposal on bondholder communications was drafted...

Two weeks back, United Wholesale Mortgage removed a 25 basis point charge it levied on conventional conforming loans when the borrower opts to manage his or her own real estate taxes and homeowners insurance. (Those payment chores are usually handled by the servicer.) Since making the change, escrow waivers have jumped 12 percent at the nations largest wholesaler/broker lender. Company CEO Mat Ishbia declared that other lenders should follow suit if they havent already. I think that overall this is good for the industry as a whole, he said in an interview. For now, the reaction to UWMs fee waiver has been...

Washington state is on track to become the first state to set capital requirements for nonbank mortgage servicers. A proposed rule has been met with resistance from the Mortgage Bankers Association, with the trade group calling on the state to halt the process and wait for pending national standards from the Conference of State Bank Supervisors. In September, Washingtons Department of Financial Institutions proposed capital requirements for nonbank servicers licensed in the state. Under the proposal, servicers would have to meet capital requirements set by the government-sponsored enterprises or a government entity. For servicers that solely handle non-agency mortgages, the Washington DFI proposed...

Fannie Mae has not treated its foreclosed properties in African-American and Latino communities the same as those in predominately white neighborhoods, according to a federal lawsuit filed this week by the National Fair Housing Alliance. The NFHA, along with 20 fair housing and civil rights groups, said its investigation found signs of racial discrimination when it comes to the upkeep and marketing of Fannies real estate-owned properties in 38 metropolitan areas across the country. These properties in minority neighborhoods were blighted...

Despite higher interest rates, publicly traded mortgage stocks have been rising since the election, but market watchers are cautious that recent gains could evaporate quickly. Two things are going on here, said Henry Coffey, an equities analyst at Wedbush Securities. Weve had a massive market rally, especially in financial stocks. But the general consensus is that the new administration is going to be less punitive than the current one. Coffey added...[Includes one data table]

Fannie Mae added: Through these actions we have demonstrated our continued dedication to providing quality care to all communities. And we remain firmly committed to continuing to provide such attention to our REO properties moving forward.

A federal jury awarded more than $93 million in damages to the federal government after finding Allied Home Mortgage entities liable for civil mortgage fraud against the FHA. A unanimous jury found Allied Home Mortgage Capital and Allied Home Mortgage Corp., as well as the companys president and chief executive, Jim C. Hodge. guilty of mortgage fraud. The jury awarded the Department of Housing and Urban Development and the Department of Justice a total of $93 million in damages, including $7.4 million against Hodge. The Allied entities allegedly violated the federal False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) in connection with a decade of fraudulent misconduct related to FHA lending. The FCA provides for treble damages and imposes a penalty of $5,500 to $11,000 for each violation. Separately, FIRREA imposes a ...

The Consumer Financial Protection Bureau has ditched the antiquated method for assessing servicer compliance with reverse mortgage-servicing rules in favor of new examination procedures. Depending on the scope, each reverse mortgage-servicing exam will include one or more of eight modules covering various facets of reverse mortgage servicing. There are two kinds of reverse mortgages. The FHA, under the Home Equity Conversion Mortgage program, insures most reverse mortgages. As with other FHA mortgage products, it has a maximum loan amount. Some lenders also offer proprietary (non-HECM) reverse mortgages, which are designed generally for borrowers with higher home values and more equity, the CFPB noted. Proprietary reverse mortgages are not federally insured. However, companies that offer them copy the consumer protections found in the HECM program, including ...

Caliber Home Loans has significantly increased its servicing portfolio  including subprime mortgages  in recent years. While rapid growth by nonbank servicers has raised some concerns among industry analysts, S&P Global Ratings said Caliber has effectively managed its growth to this point. Caliber is one of the few servicers that has increased subprime servicing volume in recent years, and officials at the company have plans for further growth. To this point, Calibers servicing growth has ...

Performance of subprime mortgages continues to improve as the amount of loans outstanding declines. Some $265.0 billion in subprime mortgages were outstanding as of the end of the third quarter, according to estimates by Inside Nonconforming Markets. Only a small volume of new subprime mortgages have been originated since 2008, and in the past couple of years, large transfers of subprime servicing have been limited, prompting subprime servicing to ... [Includes one data chart]

Most of the top 30 servicers of jumbo mortgages increased their servicing portfolios during the third quarter, according to a new Inside Nonconforming Markets ranking. The volume of jumbo mortgages outstanding rose to an estimated $892.4 billion as of the end of September, up 1.7 percent from June and up 10.2 percent from a year ago. Wells Fargo remained the top jumbo servicer, with a $275.1 billion portfolio. That was up 1.1 percent compared to the second quarter ... [Includes one data chart]

The Federal Communications Commission last week denied a request from the Mortgage Bankers Association to exempt calls from mortgage servicers to borrowers from provisions of the Telephone Consumer Protection Act. Officials at the MBA said the denial was unexpected. Among other issues, the petition had received some support from the Consumer Financial Protection Bureau and the Federal Housing Finance Agency. The TCPA and FCC rules prohibit...

Industry Groups Urge Congressional Leaders to Pass Tax Extenders Legislation. Three industry groups called upon House and Senate leaders to pass tax extenders legislation, including two critical tax provisions that are scheduled to expire at the end of 2016. In a joint letter this week, the Mortgage Bankers Association, National Association of Realtors and the National Association of Home Builders called for the rapid enactment of a broad tax extenders package, including mortgage-debt forgiveness and tax deduction for mortgage insurance premiums. Passing a legislative package of tax extenders that includes the two provisions would provide much-needed certainty to the residential real estate markets, the letter said. Federal Agencies Propose Rule to Expand Access to Private Flood Insurance. Federal banking and credit union regulators and the Farm Credit Administration have published a ...

FHA and VA loan performance improved in the third quarter of 2016 as the delinquency rate on government-backed loans declined on a seasonally adjusted basis, according to the Mortgage Bankers Associations latest mortgage delinquency survey. The FHA delinquency rate fell by 16 basis points to 8.30 percent, its lowest level since 4Q97, with all categories  30-days, 60-days and 90 days + past due  reflecting the decline. Over the quarter, the delinquency rate of FHA loans with payments 30 days past due dropped 4 bps from the previous quarter. Insured loans that were 60 days behind on their payments saw a 6 bps drop in their delinquency rate, while that for seriously delinquent loans fell 9 bps during the period. FHA mortgages showed some declines in performance on a non-seasonally adjusted basis. Approximately 8.70 percent of outstanding FHA loans were past due as of the end of the third quarter, up 25 bps from the ...

The Department of Justice lost its bid to have an FHA lawsuit against Quicken Loans heard in the nations capital after a federal judge this week ordered the case transferred to federal district court in Michigan. Judge Reggie Walton of the U.S. District Court for the District of Columbia agreed with Quicken that the proper forum for adjudicating the governments False Claims Act case is the Eastern District Court in downtown Detroit. While the court agreed that the case has national implications, it also noted the strong local interest in this matter in the Eastern District of Michigan, where Quicken Loans underwrote the FHA loans at issue, endorsed those loans, and certified its compliance as to those loans. While certain factors weighed against the transfer, the alleged unlawful activity occurred in or near Detroit, where the lender is headquartered and most of its employees are located. The case, U.S. v. Quicken Loans, ...

Since the historic election of last week, interest rates have been steadily rising, turning the tables on what increasingly looked like a moribund market for servicing sales. But not anymore. Since the Nov. 8 election, the yield on the benchmark 10-year Treasury has spiked 50 basis points to 2.24 percent with mortgage rates following in the wake. And while this spells bad news for originators  especially refinance specialists  its manna from heaven for holders of mortgage servicing rights. As Inside Mortgage Finance went to press this week, market makers were...

Mortgage performance declined somewhat in the third quarter of 2016 compared with the previous quarter, according to the Inside Mortgage Finance Large Servicer Delinquency Index. The increase in delinquencies and foreclosures was part of a seasonal trend seen in recent years. The large servicers reported a total delinquency/foreclosure rate of 5.08 percent as of the end of the third quarter, up 8.6 basis points from the previous quarter. The increase was driven by new delinquencies across various buckets  largely concentrated among FHA mortgages  while the foreclosure rate decreased slightly. Every year since 2011, the total delinquency/foreclosure rate has increased...

The FHA Mutual Mortgage Insurance Fund may be healthy enough to support a cut in forward-mortgage premiums, but officials at the Department of Housing and Urban Development arent yet willing to pull the trigger. HUD this week released its annual FHA audit showing strong improvement in the MMI Fund from the forward-mortgage side of the ledger. During a press briefing, Edward Golding, principal deputy assistant secretary for housing, said the strong audit results do indicate there is room to return pricing to that which reflects the risks in the program. He noted that the $245 billion in new FHA business in fiscal 2016 clearly added to the strength of the MMI Fund, with indications were pricing above the risk of the program. At the same time, Golding made...

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